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Trade Finance Industry Looks to Blockchain to Stem Fraud

Distributed ledger technology could cut costs and eliminate paper invoices, as well as the fraud that accompanies them.

By Chanyaporn Chanjaroen and Darren Boey, Bloomberg | Updated on May 24, 2016

The risk posed by fraud in the $4 trillion trade-financing industry has prompted banks to start exploring distributed-ledger technology like the one that underpins bitcoin.

Standard Chartered Plc, which lost almost $200 million from a fraud at China’s Qingdao port two years ago, has teamed up with DBS Group Holdings Ltd. to develop an electronic ledger of invoices that uses a parallel platform to the blockchain employed in bitcoin transactions. Lenders such as Bank of America Corp. and HSBC Holdings Plc say they’re looking at blockchain for trade finance and other banking applications.

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